In the following balance sheet, estimate the impact on the economic value of equity (EVE). If interest rates of assets fall by 1% and deposit rates increase by 1%. EVE=$( )Loan A(8%, 3 year)= $150 Deposit A(5%, 2 years)=$250 Loan B(11%, 4 years)= $200 Deposit B(7%, 3 year)= $100Total Assets = $350 Total Liabilities = $350 a. 16.44 b. 17.44 c. 18.44 d. 19.44
In the following balance sheet, estimate the impact on the economic value of equity (EVE). If interest rates of assets fall by 1% and deposit rates increase by 1%. EVE=$( )Loan A(8%, 3 year)= $150 Deposit A(5%, 2 years)=$250 Loan B(11%, 4 years)= $200 Deposit B(7%, 3 year)= $100Total Assets = $350 Total Liabilities = $350 a. 16.44 b. 17.44 c. 18.44 d. 19.44
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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In the following balance sheet, estimate the impact on the economic value of equity (EVE).
If interest rates of assets fall by 1% and deposit rates increase by 1%. EVE=$( )
Loan A
(8%, 3 year)
= $150
Deposit A
(5%, 2 years)
=$250
Loan B
(11%, 4 years)
= $200
Deposit B
(7%, 3 year)
= $100
Total Assets
= $350
Total Liabilities
= $350
a. 16.44
b. 17.44
c. 18.44
d. 19.44
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